What should our HOA board do when the president signs contracts or acts without board approval?

By OurHOA · General information · Revised October 18, 2026

What an HOA board does when the president signs a contract or orders work alone: is the HOA bound, ratify or reject, vendor letters, spending limits, removal.

Part of the HOA board handbook: running the board.

The short answer

Don't pay the invoice, sue the vendor or vote the president out in the first week. Find out exactly what was signed or promised, decide at a properly noticed board meeting whether the association will ratify it, renegotiate it or refuse it, and tell the vendor the result in writing. Then fix the gap that let it happen: a written spending resolution with dollar limits, bank signers who match it, and a letter to regular vendors saying who can authorize work. Removing the president from office is a tool for the second or third time, not the first. In most associations the president holds a title the board gave out, not a power of their own, and the board can take the title back. Rules vary by state and by your bylaws, so treat this as a guide to the board's process, not legal advice for your community.

Find out what was actually done

Start with a written inventory, because the stories will differ. Ask the president for copies of everything signed and every order given, then check the other side: the vendor's copy of the contract, emails and texts to the vendor, the bank account for any payment or deposit, and the minutes for anything that looks like approval. Write down four facts for each item. What was promised, in dollars and term. When, and by what document or message. Whether the vendor has started work or delivered anything. Whether the association has paid anything yet. Then look for authority the president may really have. Some bylaws let the president sign contracts the board has approved, and some boards have passed a resolution letting an officer approve repairs up to a set amount. An emergency clause may cover a burst pipe or a downed tree. If the act fits one of those, the problem is communication, not authority, and the fix is a better report at the next meeting.

Is the association bound

The default rule in all three states is that the board runs the association and an officer has only the authority the bylaws or the board give. Texas Business Organizations Code 3.103(b) says an officer has the authority provided by the governing documents or the body that elected the officer, and 22.201 puts the affairs of a nonprofit corporation in the hands of its board. For Texas condominiums, Property Code 82.103(a) adds that all acts of the association must be by and through the board unless the declaration, bylaws or law says otherwise. Florida 617.0841 and Colorado 7-128-302 say the same thing about officers, and Colorado 38-33.3-303(1)(a) lets the executive board act in all instances on behalf of the association. That does not make every unapproved contract void. A vendor can argue apparent authority, meaning the association's own conduct led the vendor to believe the president could sign. The Texas Supreme Court said in Gaines v. Kelly (2007) that apparent authority must rest on the acts of the principal, here the association, not on what the president claimed. If the board has let this president sign similar contracts before and paid them, the vendor's argument gets stronger. The second risk is ratification by conduct. In Willis v. Donnelly (2006) the same court described ratification as binding a principal that learns of an unauthorized contract and keeps the benefits. Paying the first invoice while the board 'thinks about it' can do exactly that. If the amount matters, get the association's attorney to read the contract before anyone pays or lets the work continue.

Decide at a meeting, not by email

The decision itself has to be a board act. In Florida, directors of an HOA may use email to talk but may not cast a vote on an association matter by email, under 720.303(2)(a), and condominium boards have the same limit under 718.112(2)(c). Texas 209.0051(h) lets a property owners' association board act outside a meeting if every director gets a chance to weigh in and vote, but the action has to be summarized, including any approved spending, and recorded in the minutes of the next meeting. Some decisions can never be made that way, including borrowing money and building new capital improvements. Colorado's nonprofit act allows action without a meeting under 7-128-202 only on written notice to every director, and any director can demand a meeting instead. With a contract the owners will ask about, hold the meeting. The board has three choices. Ratify: the work was needed, the price is fair, and the contract is one the board would have approved. Renegotiate: the need is real but the terms are not, so ask the vendor to cut scope, shorten the term or rebid. Reject: the association did not need it or cannot afford it. Before ratifying, check the rules the president skipped. Florida HOAs must get competitive bids when a contract exceeds 10 percent of the total annual budget including reserves (720.3055), and condominiums at 5 percent (718.3026). Texas 209.0052 requires a bid process for service contracts over $50,000 and sets extra conditions, including two other bids and a vote without the interested director, when the vendor is a board member, a relative or a company they own. If the president has a tie to the vendor, Florida 720.3033(6)(b) requires disclosure at least 14 days before the vote.

Wording the board can use

Motion to ratify: 'I move that the board ratify the landscaping contract with Hill Country Lawn signed by the president on March 3, for $14,200 over 12 months, having reviewed the contract and the two comparison quotes in the board packet, and that the minutes note it was signed before board approval.' Motion to decline: 'I move that the board decline to ratify the March 3 agreement with Hill Country Lawn, direct the secretary to send the vendor written notice within five business days that the agreement was signed without board authority, and refer any claim for work already done to the association's attorney.' Letter to the vendor, first paragraph: 'The board of directors of Oak Hollow Homeowners Association has reviewed the agreement dated March 3. Under our bylaws, contracts require approval by the board, and the board did not approve this agreement. Please stop any further work. We will pay for work already completed at the rates in your proposal once we receive an itemized invoice, and we are open to discussing a new agreement through our normal bid process.' Decide the payment sentence with counsel. Offering to pay for completed work is often cheaper than a fight, but it is the board's call.

Close the gap so it does not repeat

Most of these incidents happen because nobody wrote down who can commit the association to spend money. Adopt a short spending resolution. A workable version names three tiers: routine repairs under a set amount that the president or treasurer can approve and report at the next meeting, larger items that need a board vote, and true emergencies that any officer can authorize up to a cap, with an emergency meeting or report within a few days. Our guide on whether an HOA needs a purchase order or spending approval policy shows how to set the dollar figures. Then line up the controls with the resolution. Make sure the bank signers and online banking users match what the board approved, and require two people for any payment over the routine limit. Send every regular vendor a one-page letter naming who can order work and saying that any order above the routine limit comes with a copy of the board's approval. Put a standing item on each agenda where officers report anything they approved since the last meeting.

When it keeps happening

If the president keeps signing alone after the board has spoken, take the office back. Texas BOC 3.104(a) lets the governing authority remove an officer for or without cause, Florida 617.0842(2) lets the board remove any officer at any time with or without cause, and Colorado 7-128-303(4) does the same unless the bylaws say otherwise. Check your bylaws first, because they can add notice or a vote count. Removing someone as president does not remove them from the board. Only the owners can usually do that, through the process in the bylaws and state law. Our guide on whether an HOA can remove its president or officer explains the difference. Keep the meeting about authority, not character. A motion such as 'I move that the board remove Jane Doe as president, effective immediately, and elect John Roe as president for the rest of the term' is enough. Record the vote, update the bank signers the same week and tell the regular vendors.

Mistakes boards make

Paying first and arguing later. Payment is the clearest sign the association accepted the deal. Arguing on a reply-all thread. Every email is a record, and in Florida a vote by email is not valid anyway. Ratifying in thirty seconds. If the board ratifies, show the contract, the price comparison and the reason in the minutes. Our guide on whether an HOA board can ratify a past or improper decision covers what ratification can and cannot fix. Treating it as a feud. A president who ordered emergency tree work after a storm is in a different position from one who signed a five-year contract with a friend. Respond to the act, not the person. Leaving the bank access alone. If the board removes the president from office but the person still holds online banking access, the problem is not solved.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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